Everybody wants it now, and everybody needs it yesterday -- instant results.
Well, cleaning your credit is never a quick fix. I know, I know -- your cousin’s best friend told you that they can clean your credit in a quick month for a few hundred dollars -- no problem.
Don’t believe the hype.
But not to worry - although there’s no magic formula for a credit quick-fix, there are a few things that you can do to you see big changes, fast.
Here are a few tips:
1. Pull your credit score and your credit report know and get familiar with what you’ve got to deal with. A good credit score is considered to be over 720. I know what you’re thinking; “I already know my credit score is damaged and I’m afraid to see it.” But the only way to get better is to know where you’re starting. Knowing your credit score is like stepping on the scale after not working out for a while -- it’s a little frightening at first, but comforting to know what you’re dealing with.
You might feel a long ways away from 720 right now, but with a little bit of mindfulness, consistency and care, your score can get there.
We recommend using www.annualcreditreport.com for the best results.
2. If you have credit cards, ALWAYS pay on time. Thirty-five percent of your score depends on you paying on-time. Did you know that being 30 days late can show a decrease in your score by up to 90 points? That’s a big deal!
3. Never go over 30% of your available credit. If you have a Visa with a line of credit of $1000.00, you should never use over $300.00.
Although you have the ability to use the entire line, don’t do it! When you use over 30% of your availability, it your credit score is reduced. Note: your utilization is based on the average of all your credit cards.
4. Your score increases when you have a variety of open credit. Lenders typically like to see that you've used a variety of accounts responsibly. For example, my credit score was 820 when I left corporate America to start this ministry. After I paying off my car, my credit cards, and school loans, my credit score dropped 40 points. I called, asked why, and they said because I no longer have a variety of debt.
If you are still in the mid 700’s don’t worry about having a variety. Have at least 2 major credit cards. This will also boost your credit. Remember to build credit, you need to have credit. If you have trouble getting a credit card, go get a secured card. Check out this website to see some of the best secured credit card options.
#5. If you are just beginning to build your credit, see if you can become an authorized user on a family member's credit card. If you have mom, dad, sister, brother, or know someone who has excellent credit on a credit card, you can become an authorized user and their excellent credit will then be reflective on your credit score.
The good news? You will not be responsible for their debt
Bad News? If they become past due on the credit card, that past due reporting will also be reflective on your credit report and score.
You can do it -- you can build your credit! Focus, be determined, and build your score!
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